Graduating from college with student debt is increasingly becoming the norm, not the exception. Seemingly every other day, presidential candidates and higher education wonks offer proposals aimed at curbing the crisis and employers appear to be the next group to enter the fray.

At least one startup is hoping that’s the case. Gradifi, a Boston-based technology company, launched a platform Wednesday that employers can use to securely and directly make a contribution toward their employees’ student loans.

The company’s first partner, tax and consulting firm PricewaterhouseCoopers, announced last week that it will put $1,200 a year for six years toward student loans for employees in the first employment tiers at the firm. But, according to Tim DeMello, Gradifi’s chief executive, about 40 companies are on a waiting list to launch their own loan payback programs early next year.

“It’s really just a huge market because it’s such a big problem,” DeMello said. In fact, he first came up with the idea after watching a presentation during a meeting at Babson College, where he is on the board of trustees, that showed how student debt has skyrocketed over the past decade.

“I just became amazed by the topic and the fact that it impacted 40 million people in the United States” he said. “This group is a group everyone is after.”

The hope is that by offering to help this demographic pay off their loans, companies can have a leg up in the recruiting process. It appears there is pent-up demand for the benefit. About 55% of prospective college students, current college students and recent graduates said they would prefer help with repaying their student loans to a company-sponsored health care plan, according to a recent survey from ionTuition, a site that helps borrowers manage their student loan payments. Nearly half of respondents said they would prefer student loan repayment assistance over a 401(k) plan.

“It is incredibly competitive to get the best talent,” said Robert Gittings, vice chairman for client services at PwC. As a result, the company is “constantly” evaluating its benefits package to make sure they’re relevant to the needs of potential hires. “We’re certainly the first in our space (to offer the benefit), which is something that we’re proud of,” he said. “I don’t think we would mind if there are fast followers behind us.”

There are already some companies offering a version of the benefit. SimplyCast, a Canadian-based company offering a marketing automation platform, made headlines earlier this year when its CEO, Saeed El-Darahali, announced the company would help pay off its employees’ student loans every year they continued to work there. Since announcing the perk several months ago, the company has seen an uptick in applicants, El-Darahali said. Immediately following the announcement they received 50 to 80 applications a day.

“We see it as an opportunity,” El-Darahali said. “If we do the right thing from our perspective, it will prevent turnover.”

DeMello expects that more companies will follow that logic. He estimates that in the next five to 10 years, between 50,000 and 100,000 firms will be offering some sort of student loan benefit, compared with about 650,000 firms that currently offer 401(k) plans to employees.

Lenny Sanicola, a practice leader at WorldAtWork, an association of human resource professionals, is less confident in the perk’s ability to catch on. That’s largely because it’s targeted toward a specific segment of employees, so companies that aren’t made up of largely young college graduates don’t need to offer that benefit to compete. So far, just 3% of employers offer it, according to the most recent survey of benefit offerings from the Society for Human Resource Management.

Sanicola likens the benefit to unlimited paid time off or sabbaticals — niche benefits offered by a smattering of companies, but that haven’t caught on with the bulk of employers. “These are unique perks and benefits that provide a company with a certain competitive advantage, but they don’t become mainstream,” he said.

And while the offer to pay off student loans may woo an ambitious 20-something away from another, similar firm, Sanicola says he suspects student loan repayment won’t be enough to draw a young person to a company if they aren’t attracted to the job or company culture in the first place. He noted that millennials are particularly interested in finding meaning at work. “At the end of the day you have to have that sort of right work culture and the right type of job,” he said. “And this is icing on the cake.”

Still, there are benefits beyond recruiting for offering to pay back student loans, Sanicola said. For one, it’s a way for employers to boost the take-home pay of their workers without actually raising salaries. And helping employees manage their finances could keep them more focused and productive at work. That’s a big part of the reason employers are increasingly offering so-called financial wellness benefits — which typically include help managing debt, bills and savings through financial planning lessons and programs surrounding financial literacy — in the wake of the great recession.

“Throughout the mix from ages 20 to 60, people are struggling,” he said. “That’s important for an employer to think about because if I’m on the job and I’m supposed to be productive and I’m supposed to work, it’s hard for me to focus if I’m worried about these things.”

Jillian
Berman

Jillian Berman covers student debt and millennial finance. You can follow her on Twitter @JillianBerman.

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